PLDT postpones data center listing to 2027
Manuel V. Pangilinan-led PLDT Inc. has abandoned plans to list its data center business in the fourth quarter, pushing the potentially P24.2-billion offering to 2027 as rising interest rates threaten to weigh on its valuation.
In a disclosure on Tuesday, the telco giant told the local bourse it had decided to defer the real estate investment trust (REIT) listing of Vitro REIT until 2027 due to “current market conditions and rising interest rates.”
“PLDT remains committed to the proposed VITRO REIT IPO as an important part of the Group’s asset monetization and deleveraging plans, while supporting expansion of the REIT portfolio and continued growth of the Group’s data center business,” the company said.
PLDT initially targeted an offer period from Sept. 25 to Oct. 1, followed by a listing on Oct. 12.
As recently as the company’s first-half briefing in August, Vitro president and CEO Victor Genuino said the company was still sticking to that timetable.
But economists said holding off on the listing was a “sensible move,” as pushing ahead under less favorable market conditions could force PLDT to settle for a lower valuation.
“From a shareholder perspective, it makes more sense to wait for a window when market sentiment and funding conditions are more supportive,” said Jonathan Ravelas, senior adviser at Reyes Tacandong & Co.
In a Bloomberg TV interview in August, Philippine Stock Exchange president and CEO Ramon Monzon said PLDT was postponing the listing date “because they are in the process of closing deals with a few cornerstone investors.”
For Vitro, monitoring the interest-rate environment is particularly important because PLDT is pursuing the REIT route to monetize its data center assets, according to Ron Acoba, chief investment strategist at Trading Edge.
Acoba said REIT valuations were sensitive to interest rates and fixed-income yields because investors weigh their dividend returns against lower-risk alternatives such as government securities.
“REITs are primarily yield-driven investments and are therefore benchmarked against prevailing fixed-income yields. With the Philippine 10-year government bond yield currently around 7.8%, Vitro REIT would likely need to offer a dividend yield at least comparable to, and ideally at a reasonable premium over, that level to attract investors,” he said.
“Otherwise, investors may simply prefer government securities, which offer similar or better yields with substantially lower risk,” he added.
Under the planned offering, PLDT’s technology arm, ePLDT, intends to sell up to 1.91 billion secondary shares, with an overallotment option of up to 286.96 million shares, at a price of up to P11 per share.
At that price, the transaction could generate gross proceeds of up to P24.2 billion.
The proposed REIT’s initial portfolio will consist of eight operational data centers with a combined IT-ready capacity of about 24 megawatts.
Despite the delay, Ravelas said Vitro could still secure a better valuation in 2027 as its “long-term story remains intact.”
“Demand for data centers continues to grow as digitalization and AI (artificial intelligence) adoption accelerate. If PLDT can continue expanding Vitro’s footprint and earnings over the next few years, a 2027 listing could command stronger investor interest and better valuations,” he added.
